PALACOL V.

PURA FERRER-CALLEJA
[Febuary 26, 1990]
GANCAYCO, J.
Doctrine/subject: Right to self-organization
FACTS:
Manila CCBPI Sales Force Union (the Union), as the collective bargaining agent of all regular
salesmen, regular helpers, and relief helpers of the Manila Plant and Metro Manila Sales Office
of the respondent Coca-Cola Bottlers (Philippines), Inc. (the Company) concluded a new
collective bargaining agreement with the latter. Among the benefits granted was salary increase
that was given in lump sum. The president of the Union submitted to the Company the
ratification by the union members of the new CBA and authorization for the Company to deduct
union dues equivalent to P10.00 every payday or P20.00 every month and, in addition, 10% by
way of special assessment, from the CBA lump-sum pay granted to the union members.
The purpose of the special assessment, as embodied in the board resolution of the Union
sought to be levied, is to put up a cooperative and credit union; purchase vehicles and other
items needed for the benefit of the officers and the general membership; and for the payment
for services rendered by union officers, consultants and others. There was also an additional
proviso stating that the matter of allocation shall be at the discretion of our incumbent Union
President. The authorization and CBA Ratification was obtained by the Union through a secret
referendum held in separate local membership meetings on various dates
The Union consists of 800 members. 672 members originally authorized the 10% special
assessment, while 173 opposed the same. Subsequently, 170 members of the Union submitted
documents to the Company stating that although they have ratified the new CBA, they are
withdrawing or dis-authorizing the deduction of any amount from their CBA lump sum. 185
other union members submitted similar documents expressing the same intent. These
members, numbering 355 in all (170 + 185), added to the original oppositors of 173, turned the
tide in favor of dis-authorization for the special assessment, with a total of 528 objectors and a
remainder of 272 supporters.
The company filed an action for interpleader with the Bureau of Labor Relations in order to
resolve the conflicting claims of the parties concerned. Petitioners, who are regular rank-and-file
employees of the Company and bona fide members of the Union, filed a motion/complaint for
intervention therein in two groups of 161 and 94, respectively. They claimed to be among those
union members who either did not sign any individual written authorization, or having signed
one, subsequently withdrew or retracted their signatures therefrom. Union countered that the
deductions not only have the popular indorsement and approval of the general membership, but
likewise complied with the legal requirements of Article 241 (n) and (o) of the Labor Code in that
the board resolution of the Union imposing the questioned special assessment had been duly
approved in a general membership meeting and that the collection of a special fund for labor
education and research is mandated. Med-Arbiter ruled in favor of petitioners in an order
whereby he directed the Company to remit the amount it had kept in trust directly to the rankand-file personnel without delay. Appealed to BLR, reversed.

ISSUE:
Whether or not the 10 per cent assessment could be levied upon the salary of the employees
RULING:
NO.
The 10 per cent deduction was not made in accordance with the law and failed to comply with
requirement. It is then settled that All doubts in the implementation and interpretation of the
provisions of the Labor Code shall be resolved in favor of labor. The Court ordered the
remittance of P1,267,863.39 to members from whom the said amount was withheld convinced
that the deduction of the 10 per cent special assessment by the Union was not made in
accordance with the requirements provided by law. The principle that employees are protected
by law from unwarranted practices that diminish their compensation without their known edge
and consent is in accord with the constitutional principle of the State affording full protection to
labor.
The failure of the Union to comply strictly with the requirements set out by the law invalidates
the questioned special assessment. Substantial compliance is not enough in view of the fact
that the special assessment will diminish the compensation of the union members. Their
express consent is required, and this consent must be obtained in accordance with the steps
outlined by law, which must be followed to the letter. No shortcuts are allowed held local
membership meetings on separate occasions, on different dates and at various venues,
contrary to the express requirement that there must be a general membership meeting. The
contention of the Union that the local membership meetings are precisely the very general
meetings required by law is untenable because the law would not have specified a general
membership meeting had the legislative intent been to allow local meetings in lieu of the latter.
Submitted only minutes of the local membership meetings when what is required is a written
resolution adopted at the general meeting. The minutes submitted to the Company contained no
list of the members present and no record of the votes cast. Handwritten authorization which
complied with the law is valid. However, its withdrawal means no authorization was given.